Founder plans to ‘step back’ in 2010, butfirst needs growth
By Elizabeth Martin
Since its founding in 1981, St. Cloud-based Midwest EAP Solutions Inc. has been owned by CEO Doug Adamek, who holds a Ph.D. and is a Certified Employee Assistance Professional. The company grew from a single employee in 1983 to 20 employees and $2 million in revenue.
Midwest’s challenge is to grow to $5 million in revenue by 2010. That’s the year when Adamek wishes to “step back” from the company — he won’t say “retire,” his management team says.
The company provides phone-based, face-to-face, and online confidential employee support services to the employees of its clients. Its competition is national health plans that also offer employee assistance programs, mainly over the phone. But Midwest’s differentiating factor is that it’s “high touch.”
“Some of the insurance companies, what they call an employee assistance plan, we call dial-a-prayer,” says Adamek.
Although the 63-year-old Adamek intends to retain ownership “until the truck hits me,” he does have a financial plan to keep the business in his family.
“I think we have the infrastructure pretty much in place right now,” to meet the $5 million goal, says Adamek. “We know what works and doesn’t work.”
What’s missing is a clearly identified person to groom as his successor. As it is, he admits when questioned at the Upsize Growth Challenge workshop one, employees tend to duke it out in order to get his attention.
That area will need just as much thought and attention as the revenue goal if the succession is to be successful.
Solid name
As its name implies, Midwest focuses its services in the region, but the company feels it is capable of national reach. It is concerned, however, that the word “Midwest” in its name will be a limiting factor.
But Elin Raymond, president of the Mineapolis-based Sage Group and the Upsize Growth Challenge’s marketing expert, said that the term “Midwest” connotes good values, and so should be retained. The company’s national reach could be emphasized in a tagline.
The company currently partners with Preferred One, a health benefits provider, and provides employee assistance programs (EAP) to Preferred One’s clients. Midwest feels confident in this business model and would like to grow by seeking more of the same type of partnerships.
Raymond also recommends increasing Midwest’s name recognition by presenting at trade shows and conferences for insurance companies. Although it can take several months to secure a spot on a conference’s presentation agenda, the exposure to both conference attendees and fellow presenters is worth it.
Midwest could develop white papers based on those presentations and require Web site users to register in order to access them. This will allow Midwest to gather e-mail addresses that can also be used in future marketing efforts, such as press releases announcing new presentations.
“If you don’t have presentation opportunities, create your own” using Webcasting, Raymond suggests. One idea: a presentation on emerging trends in benefits services.
Services such as WebEx allow companies to hold Webcasts at little cost, says Nathan Johnston, associate partner and senior consultant with Minneapolis-based Clientek. Webcasts can help Midwest expand its geographic reach and also help the company to appear bigger, which is important as they try to partner with larger companies. Many services like WebEx also offer a 30-day free trial, Johnston says.
Adamek says he’s attended both phone and Web-based conferences before, and that they sometimes charge an access fee to participants, which can be an additional revenue source.
Raymond also emphasizes the need for Midwest to present itself as a larger organization if it hopes to attract larger partners. The company’s Web site is a great place to start.
“It has a wonderful simplicity,” says Raymond of the site. “But that simplicity also positions you as a smaller company.”
She suggests creating portals for different types of visitors, such as prospective clients, prospective partners and existing clients.
Work on connections
Michele Vaillancourt, an attorney with Winthrop & Weinstine and the Upsize Growth Challenge legal expert, asks whether Adamek has a succession plan.
“We do have a transition plan from a family perspective,” Adamek says. “We have life insurance to complement what the value of the business would be.”
“Then you’re ahead of most people,” says Vaillancourt. “That can consume a business.”
Midwest has an executive team, formed a year or so ago when Adamek first began talking about stepping back one day, and it functions well.
Wanda Piepgras, director of marketing and operations, for example, wrote the nomination that made Midwest EAP an Upsize Growth Challenge winner. She also organized the team to be well prepared to get the most out of its first workshop with the experts.
Clear direction from Adamek will be needed as to who’s in charge, though, as he nears his target date. Duane Thompson, an accounting and operations expert with EideBailly, recommends talking through the owner’s wishes as many times as it takes, and then letting junior people “practice” being in charge. That gives both them and the owner confidence that the company will be in good hands.
The fact that Midwest EAP started early, five years in advance of when Adamek wants to step back, is very positive, Thompson says. The more time a company has to plan, the better.
Midwest EAP management will also want to work on incorporating new people into its company as it grows.
Midwest has offices throughout the state of Minnesota, including two recently acquired ones, but no phone or data system to connect them all. Adamek and Mitch Best, director of business development and account services and Adamek’s son-in-law, visit the company’s various locations to keep all of the employees in the loop.
Mary Korthour, senior manager of product marketing with Minneapolis-based Eschelon Telecom, tells Adamek and Best that conference calling capabilities are at their fingertips.
“Make a very simple call to your long distance carrier and have them set up a conference call for you,” she says. “If you have a dial tone, your carrier can give you a phone number you can all dial in to.” Midwest is getting bids for voice-over-IP services, says Piepgras. But she says she’s concerned about computer or power failures. She also wonders whether the cost of the phone system made sense for a company of Midwest’s size.
“I don’t think you need to start with the Cadillac of phone systems,” says Korthour. “Size it to the size of your business with the ability to grow.”
She also recommends that the company present potential vendors with their business problem and ask for a solution, rather than simply pricing phone systems.
“You can extend that to technology in general,” says Johnston of Clientek. He cites the example of building a network by buying a new PC. It’s simple to purchase a new PC from an electronics store, but that won’t necessarily help build a network.
Doug Adamek, Midwest EAP Solutions: 320.253.1909; doug@midwesteap.com; www.midwesteap.comMitch Best, Midwest EAP Solutions: 612.285.1155; mitchell@midwesteap.com; www.midwesteap.comWanda Piepgras, Midwest EAP Solutions: 320.656.9037 ext. 104; wanda@midwesteap.com; www.midwesteap.com
